The process of registering as a sole trader (i.e. becoming self-employed), is simple in theory.
Officially you’re setting up a type of one-person business. But there’s not much bureaucracy as you are a person and a business at the same time. There are no big legal issues to deal with.
Having said this, the registration pages have changed a little bit, which can be confusing in practice.
One of the smaller announcements by Jeremy Hunt in his budget announcement (6 March 2024) was that the VAT threshold is to be raised by £5,000.
It is £90,000 per year from 1st April 2024.
This refers to the threshold of 12-monthly turnover at which a business, including sole traders, must become VAT registered. If they don’t register at that point they attract a penalty charge.
More changes to National Insurance (NI) were announced by the Chancellor Jeremy Hunt on Wednesday (6 March 2024).
As it happens, I was training at Channel 4 that day, so we were able to look at how NI was at the beginning of the day, and after lunch compare it to the announced changes.
Anyone who’s been on one of my courses will know that I have collected together a dozen ‘help sheets’ on different topics that are useful for freelancers.
If you’re new to being a sole trader (ie registered as self-employed), it can be a bit daunting that people pay you without making any deductions for tax and National Insurance (NI).
You know you need to pay tax later, but how much do you put aside?
